FINANCIAL ENVIRONMENT

Financial environment



Table of Contents

Introduction3

Financial Analysis of Nationwide Building Solutions Annual Reports4

Business Description4

History of the Company5

Discussion and Analysis of Annual Report8

Financial Ratios11

Profitability Ratios13

Liquidity Ratios14

Efficiency Ratios15

Debt Management Ratios16

Growing thier Consumer Banking portfolio16

Providing market leading customer service18

Managing costs19

Asset quality20

Future Outlook22

References24

Financial environment

Introduction

The Nationwide Group is the world's largest building society that is part of a group of organisations offering retailing banking services. Nationwide has its head office in Swindon, 1 major administrative centre in Northampton, a branch network scattered over the UK and 11 subsidiary companies. The products offered by Nationwide include:

Residential mortgage lending (funded through retail savings)

General retail banking services

Personal investment products

Insurance

Personal lending

Offshore deposit taking

Commercial lending treasury operations

There mission is to be honest and straightforward. “Treats all people with respect and as individuals and focuses on building long-term and beneficial relationships with members and employees with the objective of being the best retail financial services business in the UK”.

Nationwide goal is to increase overall market shares in the retail savings and residential mortgage markets. Its objectives, as outlined in www.nationwide.co.uk are:

To maximise value, which is comprised of the mutuality dividend and retained profits, over the long term for our current and future members; and

To provide our members with a range of top quality, competitive financial services that are widely available and delivered with speed, courtesy and reliability, backed by policies of fairness, honesty, employee importance and corporate responsibility

Nationwide is committed to remaining a building society and consequently pass on the success of its business operations to its present and future customers, also known as members, through better quality and cheaper financial products. It believes -and the majority of its members support this view - that becoming a bank will remove that emphasis meaning that business strategies will be geared towards meeting shareholders needs to the detriment of the members.

Nationwide Building Society is engaged in the provision of a diverse range of personal financial services, offering competitive pricing and excellent service. Co. operates two segments: Retail and Commercial. The Retail segment functions include prime residential lending, specialist residential lending, consumer banking, retail funding (savings products), insurance and investments and retail products marketed by Co.'s Regional Brands. The Commercial segment comprises the commercial lending business stream.

Financial Analysis of Nationwide Building Solutions Annual Reports

Business Description

Nationwide Building Society (Nationwide) provides a range of financial services in the mortgages, loans, savings accounts, credit cards, online banking, investment and insurance sectors. The group primarily operates in the UK. Nationwide is the second largest retail mortgage lender and the second largest retail savings provider in the UK. The company has a national franchise within the UK. Nationwide operates through three business divisions namely, retail, head office functions & other operations, and commercial. Retail division offers prime residential lending, specialist residential lending, consumer banking, retail funding (savings products), insurance and investments and retail products marketed by Nationwide's regional brands. The distribution channels supporting these products are included in this segment.

History of the Company

Nationwide Building Society (Nationwide) was first established in Northampton, the UK in ...